Financial Adviser, NichollsStevens.
A Chartered and Certified Financial Planner. The Financial Mail referred to Carole as a “Champion of Fairer Finance”. Carole is a Fellow of the Personal Finance Society and a Fellow of the Chartered Insurance Institute. Carole won two three national awards in the Money Management Financial Planner Awards for 2010 - Cautious Investment Adviser of the Year and Retirement Options Adviser of the Year. She was also named 2013 IHT Planner of the year.
Carole is committed to improving the professional standards within the Financial Services profession and has served on the Board of the Personal Finance Society for a number of years, as well as serving as the National President in 2006/7. She has written a number of books on the subject of pension and financial planning and frequently speaks at national conferences as well as running a financial services training company.
Funds under management are approximately £115m, the full amount on an advisory basis. The percentage of investment trust business in 2013 amounts to approximately 10%.
How do you use investment trusts?
I have a number of clients who are more sophisticated, have larger portfolios (£250,000+) as well as trusts with professional trustees. For those I will look to recommend investment trusts in the first instance. They are more likely to appreciate the risks involved. Also, there are grandparents looking to invest for their grandchildrens’ futures. In this instance I believe the benefits of better performance of investment trusts over the longer-term compared to OEICS, coupled with the effects of pound cost averaging using savings schemes, are an ideal route.
What do you like about investment trusts and how do you use investment trusts when giving advice to clients?
We build bespoke portfolios for our clients and so we can consider all investments and geographical regions to see where the most suitable investment fits a client’s objective. I like the concept of pound cost averaging and investment trusts generally have lower charges with no outflows of money when there is a run on the fund, as happens with OEICs.
And what do you dislike?
The admin headache of buying them! For clients with larger sums to invest, platforms such as Transact are used as they are cost efficient and can deal in investment trusts. However, for those clients with smaller amounts but whom I still feel investment trusts are suitable, it is not cost effective to use those sorts of platforms. I use Fidelity/CoFunds style platforms for much of my open-ended fund business as they are more cost effective investing smaller amounts.
What could boards or the AIC do more to help advisers understand investment companies?
In the open-ended arena advisers are used to seeing and meeting managers. This is not as common in the investment trust arena. This could be improved upon. Particularly I think it would be useful to hear from managers that run near identical open and closed-ended funds to talk about how they manage them and their differences, as well as how the discount/premium has worked over a period of time. Using real examples of investment trusts always help the understanding I feel.
Are there any tips or thoughts you could pass on to other advisers to help them understand or advise on investment companies more frequently?
I recommend advisers create a fictitious model portfolio of open, closed-ended and other direct equities and then monitor them for six months to see how each perform. This will help them understand the effects of things like gearing and discounts.